Eliza Labs founder Shaw Walters said the project’s native token is finished and the Eliza Foundation is shutting down after a class-action settlement used up the organization’s remaining funds.
In a post on X on Tuesday, Walters said the project settled with a group of token holders represented by Burwick Law after deciding it did not have enough money to keep fighting the case. “The token is dead. Completely. The foundation is winding down,” Walters wrote. “I am starting over, since I own the IP, and I am never letting a token come close to Eliza again.”
From ai16z to ElizaOS
The statement marks a turning point for one of the better-known AI agent projects in crypto. The project launched on Solana in October 2024 as ai16z and was pitched as an AI-run decentralized autonomous organization using the open-source Eliza framework to automate venture capital decisions.
The token later climbed to about $2.5 billion in market capitalization in January 2025 before the project rebranded to ElizaOS after Andreessen Horowitz objected to the use of the ai16z name.
What the lawsuit alleged
In April, Burwick Law filed a class-action lawsuit against Eliza Labs in the U.S. District Court for the Southern District of New York. The complaint alleged false advertising, deceptive business practices, negligent misrepresentation, and unjust enrichment.
According to the complaint, Walters and Eliza Labs marketed ai16z as the governance token of an autonomous AI-managed venture fund modeled on Andreessen Horowitz, while the project was in fact controlled by insiders. The filing also alleged that the project improperly used the venture firm’s branding, which led to the rebrand to ElizaOS. It further claimed that during a migration, the token supply was expanded from 1.1 billion to 11 billion, diluting existing holders.
Walters said the settlement consumed the foundation’s remaining treasury and available cash. “Their claim was ridiculous, but we didn't have the capital to legally fight it so we settled on giving them the rest of what we had,” he wrote.
No token, but development continues
Walters said the lawsuit, along with the culture around speculative crypto tokens, pushed him to give up on tokenization. “I don't own any tokens. I don't support any of it,” he wrote. “I love the technology and I'll come back one day when the culture has grown past this point.”
He also denied personally profiting from the project and said he earned only a modest salary comparable to that of the company’s other engineers.
Despite abandoning the token, Walters said ElizaOS development will continue. “Gonna keep building no matter what, every single day, and I’m not gonna stop until we live in a world where we each own our own data and we don’t have to pay to be smart,” Walters wrote. “That’s the mission.”
Walters said Eliza’s future will now be built without a token. He ended the message with: “Eliza is dead. Long live Eliza.”